Market ignores price woes, hits triple ton

MUMBAI: When the current fiscal comes to an end on Monday, and if bourses rule firm, the Indian equity market would have still yielded a decent 20% plus return for investors. A year ago, the Sensex closed at 13,072, only to leapfrog a whopping 62% to touch 21,206 before dipping 29% to its current levels. India is not all that bad a market, say analysts.

���There is a feeling that the market has bottomed out. The fact of the matter is that it has even discounted inflation which is at an alarming level. We expect the market to be relatively firm in coming days, as fourth quarter numbers would start trickling in from next week,��� Motilal Oswal Securities vice-president (equities) Manish Sonthalia said.

However, Mr Sonthalia added trading volumes would continue to be under pressure, with the modified securities transaction tax (STT) rules coming into play from April 1. It was decided in the Union Budget to set off STT as business expense rather than against other taxes paid, putting proprietary account traders, jobbers and arbitrageurs to a great disadvantage.

However, no real impact on turnover was felt, as combined volumes on both exchanges stood at Rs 64,000 crore on Friday. Institutional investors ��� insurance companies in particular ��� were seen buying heavily in metal, capital goods, realty, oil and gas and IT stocks.

Discounting abysmal inflation numbers and unmindful of the US credit crisis, the 30-share Sensex surged 355.73 points or 2.2% to close at 16,371.29. The broader 50-share Nifty ended 111.7 points or 2.3% higher at 4,942. The market breadth was positive on BSE, with 2,333 shares advancing compared with 370 that declined while 39 scrips remained unchanged. Tata Steel, L&T and Infosys gained 6-10% while HDFC Bank, ONGC and Tata Motors shed in the range of 1.4-2.3% during the day.

India���s inflation accelerated to a 13-month high, constraining RBI���s ability to cut interest rates to arrest an economic slowdown. Wholesale prices rose 6.68% in the week ended March 15 from a year earlier, faster than the previous week���s 5.92%. The rupee gained against the greenback on inflation data, recording the biggest weekly advance since September on speculation that policy makers will allow gains in the currency to temper rising prices. The rupee gained 1.3% this week to 39.8 per dollar.

���With commodity prices cooling off, we do not expect inflationary pressures to continue at these levels next week. The market is also expecting a lower inflation number next week,��� said SBICAP Securities��� institutional sales head Jignesh Desai. ���From what we see, the market will consolidate at current levels in the near-term. Unless hit by any global shocks, we expect the market to firm up in the coming week. Another fillip to sentiment may come from brokerages and NBFCs,��� Mr Desai added.

Asian stocks rose, completing their biggest weekly gain this year, after companies in select markets reported higher profits and predicted higher sales. Hong Kong���s Hang Seng, Japan���s Nikkei, Singapore Strait Times Index and Seoul Composite ended higher in the range of 0.2-2.7% on Friday. As per provisional data, FIIs were net buyers to the tune of Rs 1,862 crore over the last five trading sessions.